Russia central bank seen cutting rates for first time in almost a year

Reuters

Reuters

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MOSCOW (Reuters) - Russia's central bank will cut its main policy rate for the first time in almost a year when it meets on Friday, a Reuters poll predicted on Monday.

The bank has held its key rate at 11 percent <RUCBIR=ECI> since last reducing it in July 2015, maintaining a cautious stance because of inflationary risks.

But 14 out of 23 forecasters said they expected a 50 basis point rate cut at the bank's meeting as the outlook for inflation had continued to improve.

Nine economists thought the bank would leave rates unchanged.

Goldman Sachs analysts based their "cut" call on signs inflation in seasonally adjusted terms was already close to the bank's 4 percent inflation target for next year.

Annual inflation has fallen sharply since the start of the year, though it stabilized at 7.3 percent in April. Weekly data has improved since.

"We doubt any uncertainty about the UK's EU referendum or the timing of a Fed hike would deter the CBR," Goldman Sachs wrote in a note to clients.

The likelihood of the U.S. central bank raising rates at its June 14-15 meeting has receded following weaker jobs data on Friday, while polls on Britain's referendum on leaving the European Union on June 23 have thrown up contradictory results.

ING economist Dmitry Polevoy said the case for a Russian rate cut was also boosted by a relatively stable rouble since the central bank last met in April.

Among those forecasting no change in rates, Liza Ermolenko at Capital Economics said wage growth in recent months was likely to be a concern for Russian policymakers.

Vladimir Miklashevsky at Danske Bank also favored no change, noting the central bank had expressed concern in recent weeks over fiscal spending.